‘Facebook Phone’ Is Dead! Long Live ‘Facebook Home’!

FB goes with an integrated app rather than a physical phone

Today, Facebook (NASDAQ:FB) threw the tech world and Wall Street a curveball by announcing that the much-anticipated Facebook Phone was, in fact, not a phone at all.

Instead, the world was treated to “Facebook Home” — a highly integrated Android app that will be available for download on April 12 and also integrated into a new HTC phone — the “First,” which will retail for $99.99.

As usual, Mark Zuckerberg touted his latest innovation as a game-changer, specifically saying about Facebook Home that it will make it so that apps are no longer at the center of mobile phones, but “people.”

(Though, to be more accurate, it’s Facebook that Zuckerberg is trying to put at the center of mobile phones.)

Here’s how the app works: When you launch an Android phone, you will get instant access to a Facebook “Cover Feed,” which will feature large updates from your friends that you can swipe to make comments. Chat will now be through a system called “chatheads,” in which photos pop up directly on the screen and allow you to tap it to access chat. And in addition to the various Facebook features, you’ll also have access to your Android apps from this interface, such as the Google (NASDAQ:GOOG) Chrome browser.

Wall Street seems to be impressed (or maybe relieved that Facebook isn’t actually building a physical phone), as FB shares have headed about 3% higher.

Still, Home is a clear sign that Facebook realizes it has a new threat: the emerging chat app operators. These include hyper-growers like Snapchat, Line, Kik, Whatsapp, KakaoTalk and WeChat. They have become extremely popular as users want to have real-time, private communications with friends — not necessarily public status updates.

In light of Facebook’s massive user base — which includes over 650 million mobile users — Home should get immediate traction. But the company still has a problem in that it seems to be losing its cool factor. And by suddenly providing a huge validation of chat programs, it’s just raising awareness of the category — and possibly alerting users to other approaches than the traditional Facebook way.

Based in Silicon Valley, Tom Taulli is in the heart of IPO land. On a regular basis, he talks with many of the top tech CEOs and founders trying to find the next hot deals and finding out which start-ups are stinkers.

A long-time follower of the IPO scene, back in 1999 Tom started one of the first sites in the space called WebIPO. It was a place where investors got research as well as access to deals for the dot-com boom. Tom also wrote the top-selling book, Investing in IPOs. In it, he covers all the aspects of analyzing an IPO, such as reading the prospectus, detecting the risk factors and understanding some of the arcane regulations. But don’t worry — if that process is too intimidating for you, thankfully Tom will do the legwork for you right here in the IPO Playbook blog.

Tom is routinely quoted in the media about upcoming deals with his interviews on CNBC and Bloomberg TV, but he is eager to take your questions too. You can message him on Twitter at @ttaulli. And feel free to weigh in via the comments section on any of his IPO Playbook posts.